Personal Finance

5 Things You Must Know Before Investing in FD(Fixed Deposit)

Investing in FD

FD(Fixed Deposit) is one of the most popular schemes for retired or elderly persons. There is no alternative of FD for the People who want the guaranteed return in the safe mode. If you are planning to invest in FD, these are 5 unknown facts you must know before investing in FD for higher return…

1. Check the Popularity of FD Provider

While choosing an FD provider you must check the bank popularity. As per the expert’s instructions, we must check the bank credit rating before investing in FD. Besides that, we must invest in multiple banks instead of investing the whole money in a single one.

2. Check the Interest Rates before Investing in FD

Different banks provide a different rate of interest based on the time periods of your FD. Similar, People different age groups have a different rate of interest for example, elderly people have a high rate of interest. Most probably, the rate of interest varies in between 5.75% – 7.5% for average people but it has 0.5% more interest rate for elderly persons.

Top 4 banks and their rate of interests

BankFD RateTime Duration
SBI Bank5.75% – 7.0%7 Days – 10 Years
Bajaj Finserv8.0% – 8.60%12 Months – 60 Months
HDFC Bank3.50% – 7.40%7 Days – 10 Years
ICICI Bank4.00% – 7.50%7 Days – 10 Years

3. Cumulative and Non-Cumulative FD

In cumulative FD, the Interest rate is automatically re-attached after a regular interval of the time period. In this way, you will get a compound benefits and interest comes after maturity.

In non-cumulative FD, the rate of interest is regularly added in your account monthly or yearly.

4. Check the Loan availability on FD

Loan availability on FD is one of the major benefits of FD. In an emergency, we can avail up to 90% loan on our FD. The banks charge rate of interest on FD Loans which is different for every bank. If you are going to invest in FD then you must check the loan availability and its rate of interest for different banks.

5. Withdraw FD Money before time

Before the time there is a fine on withdrawal FD Money. Typically, the bank can be fined the interest by lowering the interest rate from 0.5 percent to 1 percent, after finishing its FD investment before the end of the term.

Some banks allow their customers to withdraw the money time to time from FDs, as these customers have more FDs with the same bank. Before investing in FD compare the banks which have the lowest fines on withdrawal money before the term.


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